SK hynix's M14 manufacturing plant in Icheon, Gyeonggi Province (SK hynix)
SK hynix, the world’s second-largest memory chipmaker, on Monday denied Japanese reports that the Korean government pressured the company to support the merger of its rival chipmakers, Western Digital and Kioxia Holdings.
Japanese news outlets, including Asahi Shimbun, citing unidentified sources, reported that Western Digital of the US and Kioxia of Japan, the world’s No. 3 and 4 memory chipmakers, are resuming their merger talks in April.
In the deal process, they added, SK hynix, a key Kioxia investor, had been pressured by government officials of the three countries to support the merger even though their potential union could threaten its market position.
But SK hynix flatly denied the reports, saying there has been no pressure from the Korean government related to the merger deal.
“A Japanese media company reported that the Korean government, together with government officials of Japan and the US, tried to persuade SK hynix to agree on the merger," the chipmaker said. "It is not true. SK hynix has never been pressured or pushed by the Korean government."
Seoul's Ministry of Trade, Industry and Energy also released a statement denying the reports.
SK hynix invested about 395 billion yen ($2.67 billion) in Kioxia in 2018 as a member of a consortium led by Bain Capital, the top shareholder which bought the Japanese firm from Toshiba Corp for 2 trillion yen.
SK hynix holds convertible bonds that can be converted into an equity stake of up to 15 percent in Kioxia, and its approval was one of the preconditions for the merger.
The Korean chipmaker has maintained its opposition to the possible merger while leaving room for potential cooperation with Kioxia.
After an industrial event last month, SK hynix President and CEO Kwak Noh-jung reiterated the company's opposition to the merger.
"Our stance remains the same. From the perspective of an investor, we believe it is important for the company (Kioxia) to keep its asset value," Kwak told reporters after a general meeting of the Korea Semiconductor Industry Association.
Kwak, however, emphasized that the company is open to collaboration for "win-win" benefits.
As of the third quarter of last year, Samsung Electronics topped the global memory chip market with 31.4 percent, followed by SK hynix with 20.2 percent. Western Digital and Kioxia took up 16.9 percent and 14.5 percent, respectively, and when their shares are combined, SK hynix is likely to be pushed back to the No. 4 position.
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